RingCentral, a market leader in communication and collaboration solutions for the modern marketplace, recently announced the financial results for their fourth quarter, ending the 31st of December 2019. The company achieved some fantastic outcomes, including over $1 billion in revenue run-rate and a total revenue increase of 34%.
According to Vlad Shmunis, the CEO, chairman, and founder of RingCentral, the fourth-quarter results were “outstanding” and driven by the continued momentum of sales in both enterprise and mid-market regions. The company is thrilled to have surpassed its goal of $1 billion annual revenue run rate ahead of schedule.
According to Vlad, the success of the business is rooted in RingCentral’s commitment to not only delivering excellent products, but also building a culture of strategic partnerships, evidenced by crucial relationships with Avaya, AT&T, Atos, and others. These partnerships are a strong validation of the company’s leadership in the industry, and Avaya’s commitment to discovering new opportunities for long-term growth.
The Highlights of RingCentral’s Fourth Quarter
As well as a total revenue increase of 34% in the last year, to a value of $253 million, RingCentral has also achieved a selection of other amazing financial achievements. Subscriptions revenue increased by 33% YoY to $229 million, and the company also revealed that RingCentral Office ARR increased by 36% to $877 million. Other highlights include:
- AAR subscriptions increasing 32% YoY to $960 million
- Enterprise and mid-market ARR rising by 59% YoY to $479 million
- Channel ARR increasing by 63% YoY to $300 million
- Enterprise ARR rising by 71% YoY to $293 million
GAAP operating loss for the fourth quarter was $20 million, compared to $3 million from the same period last year, RingCentral notes that this number is driven by higher share-based compensation payments, and acquisition-related matters. Net income loss per share was also $0.30 this year, compared to $0.07 during the fourth quarter of the previous year.
Total cash and cash equivalents listed on the RingCentral balance sheet by the end of the fourth quarter of 2019 equated to $344 million. This compares to $583 million by the third quarter of 2019.
A Fantastic Year for RingCentral
For the full year of 2019, total revenue was $903 million, up from a total of $674 million in 2018. This represents a growth of 34%. Additionally, operating income loss was $46 million, compared to $16 million in 2018, driven by acquisitions, share-based compensations, and other components.
Net income loss per share for the full year of 2019 was measured at $0.64 compared to $0.33 in 2018. According to RingCentral, this change has been driven by higher share-based compensation, acquisitions, and amortisation of intangibles.
Over the course of the last year, RingCentral has also achieved a number of crucial milestones. For instance, the company announced that the corporate VP for Microsoft’s Enterprise Business had joined their team. Anand Eswaran is now the President and COO for RingCentral. Additionally, RingCentral was also named a Peer Insights Customer’s Choice by Gartner for UCaaS solutions worldwide. RingCentral achieved an overall rating of 4.5 out of 5 stars based on a total of 125 reviews.
RingCentral also announced this year that Telarus, Carousel, and Westcon had all been named Platinum Partners. Looking forward, the company sees a positive future, with total revenue ranges for 2020 from $1.125 to $1.135 billion. This will represent a growth of around 25 to 26% annually. Additionally, RingCentral predicts a GAAP operating margin of between 9.6% and 10.9%, as well as a non-GAAP margin of between 9.7% and 9.6%.
Exciting Opportunities Still to Come
Moving into 2020, RingCentral has released the following predictions for the first quarter of the year:
- Total revenue range between $257 and $259 million, with an annual growth rate of around 28 to 29%
- Subscription revenue ranging from $233 to $235 million, with an annual growth of around 28 to 29%.
- GAAP operating margins of between 9.5% and 10.3%
- Non-GAAP operating margins of between 8.0% and 8.1%
- Non GAAP EPS of around $0.18 to $0.19 based on 93 million shares
- Non-GAAP tax rate of around 22.5%
- Share-based compensation ranges of around $37 to $38 million
With exciting new updates in RingCentral’s roadmap to look forward to, as well as fantastic collaborations with brands like Avaya, it will be thrilling to see what happens next for the leading communications brand.
